Will China drive the electric vehicle?

July 20, 2010

China has now apparently become the world’s largest energy consumer. It still lags the US in oil consumption, but in terms of overall energy, China is now #1 having consumed 2,252 million metric tons of oil equivalent in 2009 in the form of crude, coal, natural gas, nuclear power and renewable sources, vs. US’s 2,170 million tons.

Setting aside the weirdness that a country of about 350 million people consumes about as much as a country with 1.2 billion, the really interesting thing is whether (or not) China will use its newfound energy clout to drive changes in the global energy market.

China’s global quest for resources is now the stuff of legend as it racked up deals with Africa and Latin America. Will it put the same global market muscle into driving the development of new alternative energy sources?

“As China overtakes the U.S. as the world’s largest energy consumer, it is not only a domestic issue for China, but has repercussions for the rest of the world not only in supply terms, but also in how the energy is consumed,” Birol said in an interview by phone from Paris. “If China uses electric cars, hybrids and so on, they will impose the manufacturing line on most of the rest of the world.”

That’s why Better Place partnered with Chinese car maker Chery earlier this year to build switchable battery-capable EVs. As part of the partnership, Better Place and Chery will also try to work with the Chinese government on an EV pilot project. “We always said we want China to get in on [the battery switch] system because it creates a de facto standard,” says Better Place CEO Shai Agassi.